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It seems like an easy enough question to answer — what does handmade really mean?

But for Etsy, the online marketplace that was built around selling handmade and vintage goods, it’s been difficult to answer.

Some believed an item had to be fashioned completely through the hands of a sole creator. Others wondered if products would still be considered handmade if mass-produced components were included. Could an artist hire outside help to fill an order?

This week, New York-based Etsy, which has grown to 1 million shops with sales forecast to surpass $1 billion (U.S.) this year, decided it was time to loosen the rules.

But the changes are raising concerns that Etsy is moving away from its core business of selling “handmade” goods and paving the way for mass-produced items.

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Under the new policy, which goes into effect in January, sellers can now hire staff in different locations, outsource work to other manufacturers (with approval), and even hire shipping companies to do the delivery work.

Officials say that as Etsy becomes more successful, it needs to grow with its sellers as well as clarify things: Its dos and don’ts policy had become complicated, ballooning from 4,000 words to 14,000 words since Etsy opened in 2005.

“We had imprecise and vague rules on where the lines were,” said Etsy CEO Chad Dickerson.

“We have grappled over the past eight years about what is the definition of handmade,” he said in an interview. “The policies to participate in the marketplace have been unclear, caused a lot of stress and anxiety.”

On Etsy, there’s no cost to set up a shop, but listing an item costs 20 cents. When the item sells, Etsy charges a 3.5 per cent transaction fee.

Sales in 2012 totalled $895 million (U.S.), a 70 per cent increase from the year before.

The changes are aimed particularly at Etsy sellers who started small but achieved success and are expanding rapidly. Those sellers wondered if they still qualified to sell on the site, Dickerson said.

Dickerson insists that Etsy is not opening the floodgates to every type of manufacturing facility around the world. Sellers will have to apply to Etsy for use of factories, and they will undergo scrutiny and have to attest that they followed ethical guidelines.

Toronto handbag designer Alison Gledhill, who sells her goods on Etsy, confesses she’s enlisted help during peak periods like Christmas to fill orders.

“This whole handmade revolution is growing so quickly. I think it is new terrain for all of us,” Gledhill said in an interview. “Collectively, we’re being asked to define what handmade is.

“It’s interesting that Etsy is coming forward with their definition,” she said. “A key element of what they’re saying is they expect us to be transparent.”

While Gledhill’s business has focused on a wholesale business selling to stores, she hopes to concentrate on Etsy, which draws shoppers looking for something unique.

“People mostly stumble across me. Occasionally, I’m featured on a blog, but it’s mostly happenstance,” she said. “The majority of my clients who purchase from me on Etsy are from the United States.”

Jordan Deruiter, of Creemore, Ont., sells vintage clothes on Etsy and says the website’s policy change will help her business.

“It’s too much for me to do by myself,” she said, adding she uses a Canadian manufacturer to help with wholesale orders, but now she’ll be able to sell those items, too. “It means I can use that stock on my Etsy orders now.”

Etsy says it has already had an influx of applications to use outside manufacturers, and they are mostly small and mostly local, reflecting Etsy’s roots.

Sellers won’t be approved if they can’t explain the business practices at a manufacturer, and how goods are made. Sellers will also be required to post online and disclose how products are manufactured.

Online forums have some Etsy artisans complaining about resellers who buy items and then sell them on Etsy, passing them off as their own. Reselling still won’t be permitted.

Others worry that the new rules will pave the way for more mass-produced goods, making it harder for individual artists to compete, especially on price.

But Dickerson insisted that he doesn’t expect sellers will suddenly go out and hire 5,000 employees.

“We want them to be able to hire what they need. We trust our sellers to do that,” he said.

Still, the policy change has angered some Etsy businesses, according to Zibbet.com, an Australian web site that also features handmade and vintage goods.

It says it was flooded with so many Etsy sellers wanting to switch that Zibbet’s website crashed in the first 24 hours after Etsy’s policy change was announced.

An estimated 1,500 people signed on in that period, up from a usual sign-up rate of less than a hundred.

Unlike Etsy’s commission model, Zibbet doesn’t charge for listing items. Instead, it has a fee for premium service, ranging from $9.95 (U.S.) a month or $79 (U.S.) a year.

“Zibbet is all handmade. We’re pure to that. We’re not to change that. We’re not going to allow our sellers to use manufacturers,” said founder Jonathan Peacock.

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